The Nexus Between Trade Facilitation and Macroeconomic Variables: A Panel Data Approach

The efforts to remove obstacles to international trade, facilitate trade, and reduce costs on international trade gained momentum with the liberalization of the world. Trade facilitation is an important part of the agenda of the World Trade Organization (WTO). Trade facilitation aims to harmonize basic rules among countries to increase transparency, predictability, and efficiency. The studies conducted by the WTO present results for the economic benefits. We aim to exhibit the nexus between trade facilitation and macroeconomic indicators for 63 countries in 2007 - 2019 with panel data analysis. The period ends in 2019 to exclude the negative effects of the Coronavirus (COVID-19) pandemic. Because COVID-19 has caused significant problems in the supply chain and foreign trade transactions. Panel regression and panel causality tests confirm the significant linkage between trade facilitation and macroeconomic variables. Trade facilitation has effects on the current account balance, net trade balance, exports and import growth, inflation, and real interest rate as expected. Also, trade facilitation mainly leads to an increase in international trade and exports of high-tech products.